U.S. Department of Health and Human Services

Monday, February 18, 2002

HHS Secretary Tommy G. Thompson today announced that for the fourth consecutive year all states continue to meet the federal welfare reform law's overall work participation rates. Secretary Thompson also said that since 1992, there has been a fivefold increase in the percentage of welfare recipients who are working.

"Welfare reform is the greatest social policy change of the last 60 years," Secretary Thompson said. "Millions of people have moved from lives of dependency on the system to lives of self-sufficiency. They've learned the dignity and pride that comes from self-sufficiency through work because of these sweeping reforms."

The work participation rate is the percentage of adults who receive Temporary Assistance for Needy Families (TANF) cash assistance and who participate in a work activity for a certain number of hours. In 2000, states were required to have 40 percent of their TANF caseload in a work activity for at least 30 hours a week. At least 90 percent of two-parent families were required to work at least a combined 35 hours a week. States that do not meet the work participation rates can face financial penalties.

In 2000, 49 states, the District of Columbia and Puerto Rico met the overall work participation rates, which include both one-parent and two-parent families. Vermont is not required to meet the participation rates because it operates a waiver program.

Twenty-six of the 34 states and territories that are subject to a separate two-parent work participation rate met the rate, including the District of Columbia.

Nationally, the percentage of working welfare recipients reached 33 percent in 2000. This means that more than one in three adult welfare recipients were working in a typical month, the highest level ever recorded and nearly a fivefold increase since 1992, when only 7 percent of adult recipients were working. Eighty percent of working welfare recipients were in a paid job.

"Work is the foundation on which welfare reform is built," Secretary Thompson said. "Since welfare reform began, employment among single mothers has grown to unprecedented levels. Child poverty rates are at the lowest level since 1978. And former welfare recipients themselves say that they're better off after leaving welfare.

"Welfare reform is a remarkable example of the federal-state partnership. We're committed to supporting states and continuing the historic success of welfare reform. To that end, we'll soon be unveiling our TANF reauthorization proposal that embraces the needs of states and the families we serve."

The work participation rate for all families began at 25 percent in 1997 and has increased 5 percent each year, to 50 percent in 2002. For two-parent families, the rate started at 75 percent and increased to 90 percent in 1999, which continues to be the required rate.

States also qualify for credits for reducing their welfare caseloads, as compared to 1995. The credit adjusts the target work participation rates for each state.

Only the territories of Guam and the Virgin Islands did not meet the overall work participation rate. The states that failed to meet the two-parent rate are Alaska, Arkansas, Minnesota, Mississippi, New Mexico, North Carolina and Wisconsin; Guam also failed to meet the two-parent rate.

States that face a financial penalty can take corrective action or request an exception to the penalty.

"Since August 1996, welfare dependency has plummeted," said Wade F. Horn, Ph.D., assistant secretary for children and families. "But we're not going to stop with these successes - - our reauthorization proposal will focus increased efforts on building stronger families through work and job advancement and aim to improve the well-being of children."

As of September of 2001, the number of families receiving assistance was 2,103,000, and the number of individuals receiving assistance was 5,343,000. This means that the number of families and individuals receiving cash assistance declined 52 percent and 56 percent, respectively, since TANF began.